EX-99.1 2 d86575ex99-1.txt PRESS RELEASE DATED APRIL 26, 2001 1 EXHIBIT 99.1 APARTMENT INVESTMENT AND MANAGEMENT COMPANY REPORTS A 31% INCREASE IN AFFO, OR 16% ON A PER SHARE BASIS DENVER, COLORADO, April 26, 2001 Apartment Investment and Management Company (NYSE:AIV) ("Aimco") announced that its Adjusted Funds From Operations ("AFFO"), Aimco's measure of economic profitability, for the first quarter of 2001 equaled $115 million or $1.17 per common share, compared to $88 million or $1.01 per common share for the first quarter of 2000, an increase of 31%, or 16% on a per share basis. Aimco announced that its Funds From Operations ("FFO") for the first quarter of 2001 equaled $127 million or $1.29 per common share, compared to $98 million or $1.13 per common share for the first quarter of 2000, an increase of 30%, or 14% on a per share basis. In the quarter, Aimco charged to operations approximately $2.2 million or $.02 per share to AFFO and FFO for the complete amortization of deferred financing and loan origination costs principally related to the pay off of the Oxford term loan. This marks the sixteenth consecutive quarter in which Aimco's AFFO per share has grown at 16% or more. Aimco's compounded annual growth rate in AFFO per share for the last three and five years has been 16.5% and 19.0%, respectively. This marks the sixteenth consecutive quarter in which Aimco's FFO per share growth has exceeded 14%. Aimco's compounded annual growth rate in FFO per share for the last three and five years have been 17.3% and 17.7%, respectively. Total consolidated revenues for the first quarter 2001 were $373 million; an increase of 59% compared to total consolidated revenues of $234 million for the same period in 2000. Consolidated revenues have increased $351 million from $22 million in the first quarter of 1996 to $373 million in the first quarter of 2001, an increase of 1,595%. Compounded annual growth in consolidated revenues for the last three and five years have been 69.8% and 75.4%, respectively. As previously disclosed, the Board of Directors declared on April 18, 2001 the regular quarterly cash dividend of $0.78 per common share for the quarter ended March 31, 2001, payable on May 11, 2001 to shareholders of record on May 4, 2001. The dividend represents a distribution of 66.7% of AFFO and 60.5% of FFO for the quarter ended March 31, 2001 and a 7.13% yield based on the closing price of Aimco's Class A Common Stock of $43.75 as of April 25, 2001. SAME STORE RESULTS First quarter 2001, "same store" sales for the 670 same store apartment communities containing 181,902 units owned during both 2001 and 2000, applying Aimco's ownership interest in these "same store" apartment communities, showed a 5.6% increase in Net Operating Income, a 5.6% increase in revenues, and a 5.5% increase in operating expenses from the first quarter of 2000. Weighted average physical occupancy for the 670 apartment communities was 93.6% as of March 31, 2001, compared to 93.8% as of March 31, 2000. Average monthly rent per occupied unit was $679 at March 31, 2001 compared to $651 at March 31, 2000, an increase of 4.3%. NET ASSET VALUE Also during the quarter, the Company's estimate of its Net Asset Value increased to $50.37 per share, which represents a 15% increase over the NAV for the comparable period in 2000. 2 Apartment Investment and Management Company April 26, 2001 Page 2 ACQUISITION, SALE AND REFINANCING ACTIVITY In the quarter, Aimco completed $378 million in acquisitions, dispositions, and mortgage-financing transactions. Aimco acquired one property for aggregate consideration of $19 million and purchased $47 million of limited partnership interests. AIMCO sold 22 apartment communities for a total of $84 million of which Aimco's share of the dispositions was $32 million. First quarter refinancing activity included the closing of $228 million of new mortgages at an initial weighted-average interest rate of 5.63%. Aimco's share of the refinancing proceeds was $125 million. BALANCE SHEET In the quarter, Aimco repaid in full the remaining balance of the Oxford acquisition term loan. Aimco had borrowed a total of $302 million for the acquisition of Oxford interests in September 2000. Subsequent to the close of the quarter, Aimco increased its revolving line of credit to $400 million. At April 25, 2001, $182 million was outstanding on the line providing availability of $218 million. Since its IPO in 1994, Aimco has maintained its policy of 2:1 coverage of free cash flow to interest expense and preferred dividends. LIQUIDITY In the first quarter, internal sources of cash flow, which include cash cushion (i.e., AFFO less common dividends and principal payments on debt) and net proceeds from mortgage refinancings and property sales, generated $167 million to Aimco. Aimco expects these internal sources to provide in excess of $550 million for all of 2001. For 2000, these internal sources contributed $458 million. Cash requirements from Aimco's redevelopment, enhancement and initial capital expenditures ("ICE') activities are anticipated to be $155 million for the balance of 2001 and an additional $50 million through completion. OUTLOOK Aimco will provide earnings guidance in its quarterly earnings releases. The estimates presented are forward-looking and are based on current expectations. Management anticipates that Aimco will meet or exceed FFO of $5.40 per share for 2001 based on 5% to 6% same store net operating income growth, $500 million in gross property acquisitions and/or limited partnership tender offers and $133 million in completed redevelopments. NEW FINANCIAL DISCLOSURE PRESENTATION This press release contains expanded financial disclosure that Aimco believes will provide a more complete presentation of its unconsolidated activities. The Balance Sheet Presentation is comprehensive (see page six) and includes a pro rata consolidated balance sheet using selected balance sheet data of Aimco's ownership effected share of unconsolidated real estate partnerships, Aimco's consolidated GAAP balance sheets as of March 31, 2001 and December 31, 2000 and a reconciliation of the effect of consolidating the preferred stock subsidiaries at March 31, 2001 to the comparable balance sheet at December 31, 2000. The Income Statement Presentation (see page eleven) includes Aimco's GAAP Income Statement, Aimco's proportionate share of unconsolidated real estate partnerships, and a Proportionate Consolidated Income Statement. In addition, the Income Statement Presentation (see page 3 Apartment Investment and Management Company April 26, 2001 Page 3 eleven) also provides a reconciliation from Aimco's GAAP Income Statement to Aimco's Free Cash Flow from Business Segments (see pages eight, nine and ten). Aimco consolidated its previously unconsolidated service company activities (unconsolidated subsidiaries) due to the REIT Modernization Act (effective January 1, 2001) which allowed Aimco to have voting control in a taxable REIT subsidiary. EARNINGS CONFERENCE CALL The first quarter 2001 earnings conference call will be conducted on Friday, April 27, 2001 at 11:00 a.m. Eastern time. You may participate in the conference call by dialing 1-888-228-8198, or 1-706-645-9723 for international callers approximately five minutes before the conference call is scheduled to begin and indicating that you wish to join the Apartment Investment and Management Company first quarter 2001 earnings conference call. SUPPLEMENTAL INFORMATION Please see the attached Supplemental Information as noted below: Consolidated Statement of Income Page Five Balance Sheet Presentation Page Six FFO and AFFO Page Seven Free Cash Flow from Business Segments Page Eight - Ten Income Statement Presentation Page Eleven Balance Sheet Information Page Twelve Same Store Sales Page Thirteen Additional disclosures will be available on the Aimco Website at www.aimco.com/about/financial/1Q2001.asp as noted below. ---------------------------------------- Earnings Release with Supplemental Information Net Asset Value Apartment Unit Summary Proportionate Consolidation Proforma Income Statement FORWARD-LOOKING ASSUMPTIONS This earnings release contains forward-looking statements including statements regarding 2001 results which are subject to certain risks and uncertainties, including but not limited to; the Company's ability to maintain current occupancy and rent levels and increase in same store results. Actual results may differ materially from those described and could be affected by a variety of factors including economic conditions; changes in interest rates; governmental regulations; competition; financing risks; variations in real estate values; the failure of acquisitions to perform in accordance with expectations; possible environmental liabilities; and other risks described in our filings with the Securities and Exchange Commission. These forward-looking statements reflect management's judgment as of this date, and we assume no obligation to revise or update them to reflect future events or circumstances. 4 Apartment Investment and Management Company April 26, 2001 Page 4 ABOUT AIMCO Aimco is a real estate investment trust with headquarters in Denver, Colorado and 25 regional operating centers, which holds a geographically diversified portfolio of apartment communities. Aimco, through its subsidiaries, operates approximately 1,643 properties, including approximately 313,376 apartment units, and serves approximately one million residents. Aimco's properties are located in 47 states, the District of Columbia and Puerto Rico. Contact: Katie Murphree, Vice President Investor Relations (303) 691-4440 Paul McAuliffe, Executive Vice President and Chief Financial Officer (303) 691-4339 E-Mail: investor@aimco.com ------------------ 5 APARTMENT INVESTMENT AND MANAGEMENT COMPANY SUPPLEMENTAL REPORTING FOR THE THREE MONTHS ENDED MARCH 31, 2001 PAGE FIVE CONSOLIDATED STATEMENTS OF INCOME [A] (IN THOUSANDS, EXCEPT PER SHARE AND UNIT DATA) (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, ------------------------------------ 2001 2000 --------- --------- RENTAL PROPERTY OPERATIONS: Rental and other property revenues $ 322,234 $ 224,320 Property operating expenses [b] (125,686) (90,751) Owned property management expense [c] (3,210) (2,104) --------- --------- Income from rental property operations 193,338 131,465 --------- --------- SERVICE COMPANY BUSINESS: Management fees and other income from affiliates [b][c] 51,020 10,025 Management and other expenses (32,049) (3,904) General and administrative expenses allocation (1,281) (1,053) Amortization of intangibles (4,901) (1,575) --------- --------- Income from service company business 12,789 3,493 --------- --------- General and administrative expenses: Before allocation (4,092) (4,264) Allocation to service company business 1,281 1,053 --------- --------- General and administrative expenses, net (2,811) (3,211) Depreciation on rental property (105,391) (61,291) Interest expense (87,216) (58,207) Interest and other income [d] 14,663 13,004 Equity in earnings (losses) of unconsolidated real estate partnerships [c] (4,476) 2,445 Equity in earnings of unconsolidated subsidiaries [f] -- 2,771 Minority interest in real estate partnerships (5,625) (7,120) --------- --------- INCOME BEFORE GAIN FROM DISPOSITIONS OF PROPERTIES AND MINORITY INTEREST IN OPERATING PARTNERSHIP 15,271 23,349 Gain on disposition of properties, net 66 5,105 --------- --------- INCOME BEFORE MINORITY INTEREST IN OPERATING PARTNERSHIP 15,337 28,454 Minority interest in Operating Partnership (1,319) (2,572) --------- --------- NET INCOME $ 14,018 $ 25,882 ========= ========= Net income attributable to preferred shareholders $ 18,695 $ 14,515 ========= ========= Net income (loss) attributable to common shareholders $ (4,677) $ 11,367 ========= ========= Weighted average number of common shares outstanding 70,619 65,947 ========= ========= Weighted average number of common shares and common share equivalents outstanding 70,619 66,315 ========= ========= Basic earnings (loss) per common share $ (0.07) $ 0.17 ========= ========= Diluted earnings (loss) per common share $ (0.07) $ 0.17 ========= =========
[a] See page 8 for Aimco's free cash flow from business segments from consolidated and unconsolidated entities [b] In accordance with consolidation accounting principles, $4.0 million of reimbursement fee income for the three months ended March 31, 2001, were eliminated from the service company business and the associated expense was accordingly eliminated from rental property operations [c] In accordance with consolidation accounting principles, $7.2 million of management fee income for the three months ended March 31, 2001, were eliminated from the service company business and the associated expense was accordingly eliminated from rental property operations [d] In first quarter of 2001, interest and other income included $4.7 million of transactional income [e] In first quarter of 2001, represents Aimco's share of earnings from 99,374 apartment units in which AIMCO holds an equity interest [f] Represents Aimco's share of earnings from unconsolidated service company business in first quarter of 2000 As of January 1, 2001 this busines is now consolidated 6 APARTMENT INVESTMENT AND MANAGEMENT COMPANY SUPPLEMENTAL REPORTING FOR THE THREE MONTHS ENDED MARCH 31, 2001 PAGE SIX BALANCE SHEET PRESENTATION (IN THOUSANDS) (UNAUDITED)
CONSOLIDATED PROPORTIONATE GAAP PROPORTIONATE SHARE OF BALANCE SHEET CONSOLIDATED UNCONSOLIDATED AS OF BALANCE SHEET [a] PARTNERSHIPS [b] MARCH 31, 2001 ----------------- ----------------- -------------- ASSETS Real estate $ 7,586,821 $ 918,293 $ 6,668,528 Land 1,185,837 162,052 1,023,785 Accumulated depreciation (1,285,636) (89,544) (1,196,092) Cash and cash equivalents 113,739 -- 113,739 Investments held for sale 110,576 -- 110,576 Restricted cash 155,275 -- 155,275 Accounts receivable 78,412 -- 78,412 Deferred financing costs 50,316 -- 50,316 Goodwill 111,539 -- 111,539 Notes receivable from unconsolidated real estate partnerships 214,082 -- 214,082 Notes receivable from unconsolidated subsidiaries -- -- -- Investment in unconsolidated real estate partnerships 246,459 (369,528) 615,987 Investment in unconsolidated subsidiaries -- -- -- Other assets 201,723 -- 201,723 ----------- ----------- ----------- TOTAL ASSETS $ 8,769,143 $ 621,273 $ 8,147,870 =========== =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Secured tax-exempt bond financing - long term $ 887,228 $ 114,193 $ 773,035 Secured notes payable - long term 4,060,389 507,080 3,553,309 Term loan [e] -- -- -- Credit facility 275,603 -- 275,603 ----------- ----------- ----------- TOTAL INDEBTEDNESS 5,223,220 621,273 4,601,947 Accounts Payable 67,291 -- 67,291 Accrued liabilities and other 191,525 -- 191,525 Deferred rental income 11,267 -- 11,267 Security deposits 31,714 -- 31,714 Deferred taxes 53,394 -- 53,394 ----------- ----------- ----------- TOTAL LIABILITIES 5,578,411 621,273 4,957,138 ----------- ----------- ----------- Minority interest in other partnerships 113,924 -- 113,924 Mandatorily redeemable convertible preferred securities 32,270 -- 32,270 Minority interest in Operating Partnership 320,038 -- 320,038 STOCKHOLDERS' EQUITY Class A Common Stock 735 -- 735 Additional paid - in capital 2,175,904 -- 2,175,904 Perpetual preferred stock Preferred stock - Class C 59,845 -- 59,845 Preferred stock - Class D 105,000 -- 105,000 Preferred stock - Class G 101,000 -- 101,000 Preferred stock - Class H 49,925 -- 49,925 Preferred stock - Class Q 63,250 -- 63,250 Convertible preferred stock Preferred stock - Class B 41,947 -- 41,947 Preferred stock - Class K 125,000 -- 125,000 Preferred stock - Class L 125,000 -- 125,000 Preferred stock - Class M 30,000 -- 30,000 Preferred stock - Class N 100,000 -- 100,000 Preferred stock - Class O 100,000 -- 100,000 Preferred stock - Class P 100,000 -- 100,000 Accumulated other comprehensive income 3,550 -- 3,550 Distributions in excess of earnings (414,685) -- (414,685) Notes due on common stock purchases (41,971) -- (41,971) ----------- ----------- ----------- 2,724,500 -- 2,724,500 ----------- ----------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 8,769,143 $ 621,273 $ 8,147,870 =========== =========== =========== CONSOLIDATED EFFECT OF COMPARATIVE GAAP PREFERRED STOCK BALANCE SHEET BALANCE SHEET SUBSIDIARIES AS OF AS OF CONSOLIDATION [c] MARCH 31, 2001 [d] DECEMBER 31, 2000 ----------------- ------------------ ----------------- ASSETS Real estate $ (24,514) $ 6,644,014 $ 6,036,031 Land -- 1,023,785 976,421 Accumulated depreciation 2,331 (1,193,761) (913,263) Cash and cash equivalents (19,176) 94,563 157,115 Investments held for sale -- 110,576 -- Restricted cash (2,945) 152,330 126,914 Accounts receivable (72,036) 6,376 2,873 Deferred financing costs (264) 50,052 44,403 Goodwill (12,500) 99,039 100,532 Notes receivable from unconsolidated real estate partnerships (62,430) 151,652 140,860 ----------- Notes receivable from unconsolidated subsidiaries 149,428 149,428 190,453 Investment in unconsolidated real estate partnerships (68,845) 547,142 676,188 Investment in unconsolidated subsidiaries 139,208 139,208 107,781 Other assets (155,088) 46,635 53,566 ----------- ----------- ----------- TOTAL ASSETS $ (126,831) $ 8,021,039 $ 7,699,874 =========== =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Secured tax-exempt bond financing - long term $ -- 773,035 $ 773,035 Secured notes payable - long term (18,669) 3,534,640 3,258,342 Term loan [e] -- -- 74,040 Credit facility -- 275,603 254,700 ----------- ----------- ----------- TOTAL INDEBTEDNESS (18,669) 4,583,278 4,360,115 Accounts Payable (16,921) 50,370 88,818 Accrued liabilities and other (29,657) 161,868 211,324 Deferred rental income (5,103) 6,164 5,611 Security deposits (376) 31,338 28,332 Deferred taxes (53,394) -- -- ----------- ----------- ----------- TOTAL LIABILITIES (124,120) 4,833,018 4,694,200 ----------- ----------- ----------- Minority interest in other partnerships (1) 113,923 139,731 Mandatorily redeemable convertible preferred securities -- 32,270 32,330 Minority interest in Operating Partnership 54 320,092 331,956 STOCKHOLDERS' EQUITY Class A Common Stock -- 735 713 Additional paid - in capital -- 2,175,904 2,072,208 Perpetual preferred stock Preferred stock - Class C -- 59,845 59,845 Preferred stock - Class D -- 105,000 105,000 Preferred stock - Class G -- 101,000 101,000 Preferred stock - Class H -- 49,925 49,925 Preferred stock - Class Q -- 63,250 -- Convertible preferred stock Preferred stock - Class B -- 41,947 41,947 Preferred stock - Class K -- 125,000 125,000 Preferred stock - Class L -- 125,000 125,000 Preferred stock - Class M -- 30,000 30,000 Preferred stock - Class N -- 100,000 100,000 Preferred stock - Class O -- 100,000 100,000 Preferred stock - Class P -- 100,000 -- Accumulated other comprehensive income -- 3,550 -- Distributions in excess of earnings (2,764) (417,449) (364,679) Notes due on common stock purchases -- (41,971) (44,302) ----------- ----------- ----------- (2,764) 2,721,736 2,501,657 ----------- ----------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ (126,831) $ 8,021,039 $ 7,699,874 =========== =========== ===========
[a] Aimco's proportionate consolidated balance sheet, which includes the GAAP balance sheet as of March 31, 2001, plus the proportionate share of selected historical unconsolidated balance sheet data to include only real estate, land, accumulated depreciation and secured debt, as of March 31, 2001 [b] Total of Aimco's proportionate share of selected historical unconsolidated balance sheet data to include only real estate, land, accumulated depreciation and secured debt, as of March 31, 2001 [c] The balance sheet of the preferred stock subsidiaries, net of eliminations, as of March 31, 2001 [d] Aimco's consolidated balance sheet, not including the balance sheet of the preferred stock subsidiaries, as of March 31, 2001 (for comparative purposes to December 31, 2000) [e] The term debt at December 31, 2000 was $137.0 million, of which $63.0 million was recorded on the books of the preferred stock subsidiaries 7 APARTMENT INVESTMENT AND MANAGEMENT COMPANY SUPPLEMENTAL REPORTING FOR THE THREE MONTHS ENDED MARCH 31, 2001 PAGE SEVEN FUNDS FROM OPERATIONS AND ADJUSTED FUNDS FROM OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED)
FOR THE FOR THE THREE MONTHS ENDED THREE MONTHS ENDED MARCH 31,2001 MARCH 31,2000 ------------------ ------------------ OPERATING ACTIVITIES: Income before minority interest in Operating Partnership $ 15,337 $ 28,454 Gain on disposition of properties (66) (5,105) Real estate depreciation, net of minority interests 97,811 56,977 Real estate depreciation related to unconsolidated entities 15,006 18,962 Amortization of intangibles 4,901 2,083 Deferred taxes -- 852 Preferred stock dividends and distributions (6,735) (6,530) Interest expense on mandatorily redeemable convertible preferred securities 525 2,429 --------- --------- FUNDS FROM OPERATIONS $ 126,779 $ 98,122 Recurring capital replacements (11,403) (9,899) --------- --------- ADJUSTED FUNDS FROM OPERATIONS $ 115,376 $ 88,223 ========= ========= Weighted average common shares, common share equivalents and Operating Partnership units outstanding: Common share and common share equivalents 89,824 80,790 Operating Partnership units 8,751 6,360 --------- --------- 98,575 87,150 ========= ========= PER COMMON SHARE: Funds From Operations $ 1.29 $ 1.13 Adjusted Funds From Operations $ 1.17 $ 1.01 Dividends Declared $ 0.780 $ 0.700
PERCENTAGE OTHER DATA: MARCH 31, 2001 MARCH 31, 2000 INCREASE (DECREASE) ---------- -------------- -------------- ------------------ Same store: Weighted average physical occupancy 93.6% 93.8% -0.2% Average monthly rent per occupied unit $ 679 $ 651 4.3% Total portfolio: Weighted average physical occupancy 92.8% 92.0% 0.8% Average monthly rent per occupied unit $ 681 $ 651 4.6%
8 APARTMENT INVESTMENT AND MANAGEMENT COMPANY SUPPLEMENTAL REPORTING FOR THE THREE MONTHS ENDED MARCH 31, 2001 PAGE EIGHT FREE CASH FLOW FROM BUSINESS SEGMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2001 (IN THOUSANDS, EXCEPT PER UNIT DATA) (UNAUDITED)
CONSOLIDATED UNCONSOLIDATED TOTAL % ------------ -------------- --------- --------- REAL ESTATE Conventional Average monthly rent greater than $900 per unit (15,785 equivalent units) $ 37,585 $ 2,498 $ 40,083 19.2% Average monthly rent $800 to $900 per unit (12,183 equivalent units) 23,201 1,261 24,462 11.7% Average monthly rent $700 to $800 per unit (15,759 equivalent units) 23,947 2,057 26,004 12.4% Average monthly rent $600 to $700 per unit (38,355 equivalent units) 46,033 4,361 50,394 24.1% Average monthly rent $500 to $600 per unit (36,019 equivalent units) 32,663 3,783 36,446 17.4% Average monthly rent less than $500 per unit (16,292 equivalent units) 10,473 373 10,846 5.2% --------- --------- --------- ------- Subtotal conventional real estate contribution to Free Cash Flow 173,902 14,333 188,235 90.0% Affordable (14,692 equivalent units) 5,533 6,496 12,029 5.7 College housing (average rent of $630 per month) (3,365 equivalent units) 2,950 173 3,123 1.5% Other real estate 1,615 17 1,632 0.8% Resident services (130) 77 (53) 0.0% Minority interest (25,204) -- (25,204) -12.0% --------- --------- --------- ------- TOTAL REAL ESTATE CONTRIBUTION TO FREE CASH FLOW 158,666 21,096 179,762 86.0% SERVICE BUSINESSES Management contracts (property and asset management) Controlled properties 7,185 -- 7,185 3.4% Third party with terms in excess of one year 196 -- 196 0.1% Third party cancelable in 30 days 325 -- 325 0.2% Other service income 2,514 -- 2,514 1.2% --------- --------- --------- ------- Service business contribution to free cash flow before fees 10,220 -- 10,220 4.9% Activity based fees 7,470 -- 7,470 3.6% --------- --------- --------- ------- TOTAL SERVICE BUSINESS CONTRIBUTION TO FREE CASH FLOW 17,690 -- 17,690 8.5% INTEREST AND OTHER INCOME General partner loan interest 6,334 -- 6,334 3.0% Transactional income 4,735 -- 4,735 2.3% Money market and interest bearing accounts 3,127 -- 3,127 1.5% Other notes receivable 467 -- 467 0.2% --------- --------- --------- -------- TOTAL INTEREST AND OTHER INCOME CONTRIBUTION TO FREE CASH FLOW 14,663 -- 14,663 7.0% General and Administrative Expense (2,811) -- (2,811) -1.5% --------- --------- --------- -------- FREE CASH FLOW 188,208 21,096 209,304 100.0%
9 APARTMENT INVESTMENT AND MANAGEMENT COMPANY SUPPLEMENTAL REPORTING FOR THE THREE MONTHS ENDED MARCH 31, 2001 PAGE NINE FREE CASH FLOW FROM BUSINESS SEGMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2001 (IN THOUSANDS, EXCEPT PER UNIT DATA) (UNAUDITED)
BASIC DILUTED ------------------------------------- ---------- CONSOLIDATED UNCONSOLIDATED TOTAL TOTAL ------------ -------------- ------- ---------- FREE CASH FLOW 188,208 21,096 209,304 209,304 COST OF SENIOR CAPITAL Interest expense: Secured debt Long-term, fixed rate (75,675) (9,870) (85,545) (85,545) Long-term, variable rate (722) (2,524) (3,246) (3,246) Short-term (2,188) (106) (2,294) (2,294) Lines of credit and other unsecured debt (9,738) (1) (9,739) (9,739) Interest expense on convertible preferred securities (525) -- (525) -- Interest capitalized 1,632 -- 1,632 1,632 --------- --------- --------- --------- Total interest expense before minority interest (87,216) (12,501) (99,717) (99,192) Minority interest share of interest expense 12,678 -- 12,678 12,678 --------- --------- --------- --------- Total interest expense after minority interest (74,538) (12,501) (87,039) (86,514) Dividends on preferred OP units (2,101) -- (2,101) -- Dividends on preferred securities owned by minority interest (678) -- (678) -- Dividends on preferred stock (18,695) -- (18,695) (7,414) --------- --------- --------- --------- Total dividends on preferred securities (21,474) -- (21,474) (7,414) Non-structural depreciation, net of capital replacements (3,836) (289) (4,125) (4,125) Amortization of intangibles (4,901) -- (4,901) (4,901) Gain on sales of real estate 66 -- 66 66 --------- --------- --------- --------- EARNINGS BEFORE STRUCTURAL DEPRECIATION 83,525 8,306 91,831 106,416 Structural depreciation, net of minority interest in other entities (84,508) (12,782) (97,290) (97,290) Interest expense on convertible preferred securities -- -- -- (525) Dividends on preferred securities -- -- -- (14,060) --------- --------- --------- --------- NET INCOME (LOSS) ATTRIBUTABLE TO OP UNIT AND STOCKHOLDERS (983) (4,476) (5,459) (5,459) Gain on sales of real estate (66) -- (66) (66) Structural depreciation, net of minority interest in other entities 84,508 12,782 97,290 97,290 Non-structural depreciation, net of minority interest in other entities 13,304 2,224 15,528 15,528 Amortization of intangibles 4,901 -- 4,901 4,901 Interest expense on convertible preferred securities -- -- -- 525 Dividends on preferred securities -- -- -- 14,060 --------- --------- --------- --------- FUNDS FROM OPERATIONS 101,664 10,530 112,194 126,779 Capital replacement reserve (9,468) (1,935) (11,403) (11,403) --------- --------- --------- --------- ADJUSTED FUNDS FROM OPERATIONS $ 92,196 $ 8,595 $ 100,791 $ 115,376 ========= ========= ========= =========
Earnings Earnings Shares Per Share -------- ------ --------- EBSD Basic $ 91,831 81,750 Diluted 106,416 98,575 Net Income (Loss) Basic (5,459) 81,750 $ (0.07) Diluted (5,459) 81,750 $ (0.07) FFO Basic 112,194 81,750 Diluted 126,779 98,575 AFFO Basic 100,791 81,750 Diluted 115,376 98,575
10 APARTMENT INVESTMENT AND MANAGEMENT COMPANY SUPPLEMENTAL REPORTING FOR THE THREE MONTHS ENDED MARCH 31, 2001 PAGE TEN Free Cash Flow, Earnings Before Structural Depreciation, Funds From Operations, and Adjusted Funds From Operations are measurement standards used by the Company's management. These should not be considered alternatives to net income or cash flow from operating activities as determined in accordance with GAAP as an indication of the Company's performance or as a measure of liquidity. - "Free Cash Flow" ("FCF") is defined by the Company as net operating income minus the capital spending required to maintain the related assets. It measures profitability prior to the cost of capital. - "Earnings Before Structural Depreciation" ("EBSD") is defined by the Company as Net Income, determined in accordance with GAAP, plus "Structural depreciation," i.e. depreciation of buildings and land improvements whose useful lives exceed 20 years. - "Funds From Operations" ("FFO") is defined by the Board of Governors of the National Association of Real Estate Investment Trusts ("NAREIT") as net income (loss), computed in accordance with GAAP, excluding gains and losses from debt restructuring and sales of property, plus real estate related depreciation and amortization (excluding amortization of financing costs), and after adjustment for unconsolidated partnerships and joint ventures. The Company calculates FFO (diluted) based on the NAREIT definition, as further adjusted for minority interest in the AIMCO Operating Partnership, amortization of intangibles, interest expense on manadatorily redeemable convertible preferred securities, the non-cash deferred portion of the income tax provision and less the payment of dividends on perpetual and non-dilutive convertible preferred stock. There can be no assurance that the Company's basis for computing FFO is comparable with that of other real estate investment trusts. - "Adjusted Funds From Operations" ("AFFO") is defined by the Company as FFO less a charge for capital replacements equal to at least $300 per apartment unit. RECONCILIATION OF FCF, EBSD, FFO AND AFFO TO NET INCOME:
FOR THE THREE MONTHS ENDED MARCH 31, 2001 --------------------------------------------------- FCF EBSD FFO AFFO --------- --------- --------- --------- Amount per Free Cash Flow Schedule $ 209,304 $ 91,831 $ 112,194 $ 100,791 Total interest expense after minority interest (87,039) -- -- -- Dividends on preferred securities owned by minority interest (678) -- -- -- Dividends on preferred OP Units -- 2,101 2,101 2,101 Dividends on preferred stock -- 18,695 18,695 18,695 Structural depreciation, net of minority interest (97,290) (97,290) (97,290) (97,290) Non-structural depreciation, net of minority interest (15,528) -- (15,528) (15,528) Capital replacements 11,403 -- -- 11,403 Amortization of intangibles (4,901) -- (4,901) (4,901) Gain on sale 66 -- 66 66 Deferred tax provision -- -- -- -- Minority interest in Operating Partnership (1,319) (1,319) (1,319) (1,319) --------- --------- --------- --------- Net Income $ 14,018 $ 14,018 $ 14,018 $ 14,018 ========= ========= ========= =========
11 APARTMENT INVESTMENT AND MANAGEMENT COMPANY SUPPLEMENTAL REPORTING FOR THE THREE MONTHS ENDED MARCH 31, 2001 PAGE ELEVEN INCOME STATEMENT PRESENTATION FOR THE THREE MONTHS ENDED MARCH 31, 2001 (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED)
PROPORTIONATE AIMCO SHARE OF PROPORTIONATE GAAP INCOME UNCONSOLIDATED CONSOLIDATED STATEMENT [a] PARTNERSHIPS [b] INCOME STATEMENT [c] ------------- --------------- -------------------- RENTAL PROPERTY OPERATIONS: Rental and other property revenues 322,234 48,935 371,169 Property operating expenses (125,686) (23,264) (148,950) Owned property management expense (3,210) (2,640) (5,850) Minority interest -- -- -- -------- -------- -------- INCOME FROM RENTAL PROPERTY OPERATIONS 193,338 23,031 -- SERVICE COMPANY BUSINESS: Management fees and other income from affiliates 51,020 -- 51,020 Management and other expenses (32,049) -- (32,049) General and administrative expenses allocation (1,281) -- (1,281) Amortization of intangibles (4,901) -- (4,901) -------- -------- -------- INCOME FROM SERVICE COMPANY BUSINESS 12,789 -- 12,789 General and administrative expenses: Before allocation (4,092) -- (4,092) Allocation to consolidated service company business 1,281 -- 1,281 -------- -------- -------- General and administrative expenses, net (2,811) -- -- Depreciation on rental property (105,391) (15,006) (120,397) Interest expense (87,216) (12,501) (99,717) Interest and other income 14,663 -- 14,663 Equity in earnings (losses) of unconsolidated real estate partnerships (4,476) 4,476 -- Minority interest in real estate partnerships (5,625) -- (5,625) Amortization of intangibles -- -- -- -------- -------- -------- Income before gain from dispositions of properties and minority interest in Operating Partnership 15,271 -- -- Gain on disposition of properties 66 -- 66 -------- -------- -------- Income before minority interest in Operating Partnership 15,337 -- -- Minority interest in Operating Partnership, preferred (2,101) -- (2,101) Minority interest in Operating Partnership, common 782 -- 782 -------- -------- -------- Net income 14,018 -- 14,018 Net income attributable to preferred shareholders 18,695 18,695 Net income (loss) attributable to common shareholders (4,677) (4,677) Basic earnings (loss) per common share $ (0.07) $ (0.07) Diluted earnings (loss) per common share $ (0.07) $ (0.07) Weighted average number of common shares outstanding 70,619 Weighted average number of common shares and common share equivalents outstanding 70,619 Dividends paid per common share $ 0.78 RECONCILATION TO FREE CASH FLOW FROM BUSINESS SEGMENTS [d] --------------------------------------------------------- INTANGIBLES MINORITY CAPITAL FREE CASH AMORTIZATION INTEREST REPLACEMENTS FLOW ------------ -------- ------------ --------- RENTAL PROPERTY OPERATIONS: Rental and other property revenues -- -- -- 371,169 Property operating expenses -- -- (11,403) (160,353) Owned property management expense -- -- -- (5,850) Minority interest -- (25,204) -- (25,204) -------- -------- -------- -------- INCOME FROM RENTAL PROPERTY OPERATIONS 16,369 (25,204) (11,403) 179,762 SERVICE COMPANY BUSINESS: Management fees and other income from affiliates -- -- -- 51,020 Management and other expenses -- -- -- (32,049) General and administrative expenses allocation -- -- -- (1,281) Amortization of intangibles 4,901 -- -- -- -------- -------- -------- -------- INCOME FROM SERVICE COMPANY BUSINESS 4,901 -- -- 17,690 General and administrative expenses: Before allocation -- -- -- (4,092) Allocation to consolidated service company business -- -- -- 1,281 -------- -------- -------- -------- General and administrative expenses, net (2,811) -- -- (2,811) Depreciation on rental property -- 7,579 11,403 (101,415) Interest expense -- 12,678 -- (87,039) Interest and other income -- -- -- 14,663 Equity in earnings (losses) of unconsolidated real estate partnerships -- -- -- -- Minority interest in real estate partnerships -- 4,947 -- (678) Amortization of intangibles (4,901) -- -- (4,901) -------- -------- -------- -------- Income before gain from dispositions of properties and minority interest in Operating Partnership 15,271 -- -- 15,271 Gain on disposition of properties -- -- -- 66 -------- -------- -------- -------- Income before minority interest in Operating Partnership 15,337 -- -- 15,337 Minority interest in Operating Partnership, preferred -- -- -- (2,101) Minority interest in Operating Partnership, common -- -- -- 782 -------- -------- -------- -------- Net income -- -- -- 14,018 Net income attributable to preferred shareholders 18,695 Net income (loss) attributable to common shareholders (782) (5,459) Basic earnings (loss) per common share $ (0.07) Diluted earnings (loss) per common share $ (0.07) Weighted average number of common shares outstanding Weighted average number of common shares and common share equivalents outstanding Dividends paid per common share
[a] Aimco's consolidated statement of income on a GAAP basis [b] Aimco's proportionate share of unconsolidated real estate partnerships [c] Total of Aimco's proportionate share of unconsolidated real estate partnerships and consolidated operations [d] Reconcilation of the proportionate consolidated income statement to the Free Cash Flow From Business Segments on page 8 12 APARTMENT INVESTMENT AND MANAGEMENT COMPANY SUPPLEMENTAL REPORTING FOR THE THREE MONTHS ENDED MARCH 31, 2001 PAGE TWELVE BALANCE SHEET INFORMATION (IN THOUSANDS) (UNAUDITED)
PROPERTY DEBT: Consolidated vs. Unconsolidated: Weighted Average Amount Rate ----------- ---------------- Consolidated Fixed $ 4,181,228 7.80% Variable 145,116 5.91% ----------- ----------- Sub-Total Consolidated 4,326,344 Minority Interest (668,270) ----------- ----------- Sub-Total Consolidated less Minority interest $ 3,658,074 7.74% Unconsolidated Fixed 476,292 7.54% Variable 144,981 5.89% ----------- ----------- Sub-Total Unconsolidated 621,273 ----------- ----------- Grand Total $ 4,279,347 7.67% =========== =========== ACQUISITIONS FOR THE QUARTER ENDED MARCH 31, 2001: Real Estate Apartment Properties Acquired $ 19,300 Limited Partner Equity Interests $ 47,000 COMMON SHARES OUTSTANDING AS OF MARCH 31, 2001: Common stock 73,523 OP and special units 11,124 ----------- 84,647 ===========
13 APARTMENT INVESTMENT AND MANAGEMENT COMPANY SUPPLEMENTAL REPORTING FOR THE THREE MONTHS ENDED MARCH 31, 2001 PAGE THIRTEEN SAME STORE SALES -- MARCH QTD 2001 TOP 40 MARKETS (Ownership Effected) (In thousands, except property and per unit data)
MARCH 2001 ------------------------------ MSA SITES UNITS OWN REVENUE EXPENSE N O I ---------------------------------- ----- ------- ------ --------- -------- --------- Washington 24 11,452 68.8% $ 22,157 $ 6,286 $ 15,871 Chicago 20 5,979 83.3% 15,144 5,720 9,424 Phoenix-Mesa 32 8,089 90.3% 13,249 4,770 8,479 Houston 38 10,262 79.6% 13,591 6,038 7,553 Atlanta 25 6,516 73.5% 10,276 3,402 6,874 Indianapolis 31 9,412 68.2% 10,815 4,342 6,473 Tampa-St. Petersburg-Clearwater 23 6,129 77.3% 8,672 3,234 5,438 Orlando 18 5,164 75.8% 7,545 2,728 4,817 Dallas 23 6,350 61.2% 7,353 2,799 4,554 Miami 9 3,235 82.0% 7,320 2,800 4,520 Philadelphia 6 3,436 66.0% 7,132 2,712 4,420 Norfolk-Virginia Beach-Newport News 13 3,548 82.2% 5,636 1,970 3,666 Denver 10 2,605 69.6% 4,611 1,163 3,448 Nashville 11 3,752 66.2% 4,521 1,675 2,846 Raleigh-Durham-Chapel Hill 11 3,024 70.6% 4,160 1,356 2,804 Grand Rapids-Muskegon-Holland 4 2,753 99.2% 4,721 1,941 2,780 San Diego 6 1,737 83.3% 3,762 1,155 2,607 San Antonio 16 3,602 97.9% 5,021 2,444 2,577 Fort Wayne 3 2,459 93.2% 3,744 1,389 2,355 Middlesex-Somerset-Hunterdon 5 1,960 63.1% 3,410 1,121 2,289 FortLauderdale 6 1,658 87.8% 3,437 1,207 2,230 West Palm Beach-Boca Raton 6 1,727 85.8% 3,435 1,259 2,176 Austin-San Marcos 10 2,308 67.4% 3,253 1,142 2,111 Salt Lake City-Ogden 6 2,116 74.0% 2,858 883 1,975 Cincinnati 11 2,671 61.0% 3,242 1,398 1,844 Jacksonville 7 2,055 78.5% 2,991 1,156 1,835 Lansing-East Lansing 9 2,118 64.7% 2,758 988 1,770 Tucson 6 1,866 100.0% 2,919 1,165 1,754 Orange County 2 824 89.7% 1,995 477 1,518 Charlotte-Gastonia-Rock Hill 11 2,336 68.1% 2,596 1,097 1,499 Baltimore 5 1,229 71.9% 2,236 746 1,490 Columbus 12 2,531 52.6% 2,286 929 1,357 Columbia 7 1,670 68.3% 2,080 776 1,304 FortWorth-Arlington 11 2,270 61.6% 2,366 1,064 1,302 Montgomery 9 2,338 65.0% 1,925 633 1,292 Hartford 2 650 92.0% 1,615 363 1,252 Lafayette 5 1,170 88.8% 1,895 649 1,246 Las Vegas 4 1,253 85.7% 1,806 654 1,152 DaytonaBeach 4 932 94.2% 1,730 585 1,145 Los Angeles-Long Beach 4 1,683 24.3% 1,452 309 1,143 Other Markets (85) 205 45,033 61.2% 49,809 19,280 30,529 ----- ------- ----- --------- -------- --------- AIMCO - SSS 670 181,902 71.6% $ 261,524 $ 95,805 $ 165,719 ===== ======= ===== ========= ======== ========= MARCH 2000 CHANGE (2001 LESS MARCH 2000) ------------------------------ ---------------------------------------------------- MSA REVENUE EXPENSE N O I REVENUE PCT EXPENSE PCT N O I PCT ---------------------------------- --------- -------- --------- -------- ----- ------- ------ ------- ----- Washington $ 19,112 $ 6,097 $ 13,015 $ 3,045 15.9% $ 189 3.1% $ 2,856 21.9% Chicago 14,175 4,814 9,361 969 6.8% 906 18.8% 63 0.7% Phoenix-Mesa 12,744 4,273 8,471 505 4.0% 497 11.6% 8 0.1% Houston 13,201 5,466 7,735 390 3.0% 572 10.5% (182) -2.4% Atlanta 9,893 3,344 6,549 383 3.9% 58 1.7% 325 5.0% Indianapolis 10,176 4,183 5,993 639 6.3% 159 3.8% 480 8.0% Tampa-St. Petersburg-Clearwater 8,038 3,261 4,777 634 7.9% (27) -0.8% 661 13.8% Orlando 7,293 2,780 4,513 252 3.5% (52) -1.9% 304 6.7% Dallas 7,050 2,799 4,251 303 4.3% - 0.0% 303 7.1% Miami 6,817 2,615 4,202 503 7.4% 185 7.1% 318 7.6% Philadelphia 6,596 2,468 4,128 536 8.1% 244 9.9% 292 7.1% Norfolk-Virginia Beach-Newport News 5,481 2,016 3,465 155 2.8% (46) -2.3% 201 5.8% Denver 4,176 1,095 3,081 435 10.4% 68 6.2% 367 11.9% Nashville 4,669 1,715 2,954 (148) -3.2% (40) -2.3% (108) -3.7% Raleigh-Durham-Chapel Hill 4,043 1,360 2,683 117 2.9% (4) -0.3% 121 4.5% Grand Rapids-Muskegon-Holland 4,266 1,674 2,592 455 10.7% 267 15.9% 188 7.3% San Diego 3,313 1,037 2,276 449 13.6% 118 11.4% 331 14.5% San Antonio 5,116 2,287 2,829 (95) -1.9% 157 6.9% (252) -8.9% Fort Wayne 3,754 1,426 2,328 (10) -0.3% (37) -2.6% 27 1.2% Middlesex-Somerset-Hunterdon 3,128 984 2,144 282 9.0% 137 13.9% 145 6.8% FortLauderdale 3,203 1,350 1,853 234 7.3% (143) -10.6% 377 20.3% West Palm Beach-Boca Raton 3,433 1,223 2,210 2 0.1% 36 2.9% (34) -1.5% Austin-San Marcos 3,039 1,107 1,932 214 7.0% 35 3.2% 179 9.3% Salt Lake City-Ogden 2,760 872 1,888 98 3.6% 11 1.3% 87 4.6% Cincinnati 3,202 1,336 1,866 40 1.2% 62 4.6% (22) -1.2% Jacksonville 2,817 1,054 1,763 174 6.2% 102 9.7% 72 4.1% Lansing-East Lansing 2,624 1,036 1,588 134 5.1% (48) -4.6% 182 11.5% Tucson 2,903 977 1,926 16 0.6% 188 19.2% (172) -8.9% Orange County 1,725 488 1,237 270 15.7% (11) -2.3% 281 22.7% Charlotte-Gastonia-Rock Hill 2,604 1,017 1,587 (8) -0.3% 80 7.9% (88) -5.5% Baltimore 2,104 698 1,406 132 6.3% 48 6.9% 84 6.0% Columbus 2,348 862 1,486 (62) -2.6% 67 7.8% (129) -8.7% Columbia 1,947 740 1,207 133 6.8% 36 4.9% 97 8.0% FortWorth-Arlington 2,273 1,012 1,261 93 4.1% 52 5.1% 41 3.3% Montgomery 2,043 683 1,360 (118) -5.8% (50) -7.3% (68) -5.0% Hartford 1,539 392 1,147 76 4.9% (29) -7.4% 105 9.2% Lafayette 1,897 594 1,303 (2) -0.1% 55 9.3% (57) -4.4% Las Vegas 1,771 619 1,152 35 2.0% 35 5.7% - 0.0% DaytonaBeach 1,648 625 1,023 82 5.0% (40) -6.4% 122 11.9% Los Angeles-Long Beach 1,267 358 909 185 14.6% (49) -13.7% 234 25.7% Other Markets (85) 47,468 18,053 29,415 2,341 4.9% 1,227 6.8% 1,114 3.8% --------- -------- --------- -------- ---- ------- ----- ------- ----- AIMCO - SSS $ 247,656 $ 90,790 $ 156,866 $ 13,868 5.6% $ 5,015 5.5% $ 8,853 5.6% ========= ======== ========= ======== ==== ======= ===== ======= =====
14 AIMCO Q1 2001 EARNINGS CONFERENCE CALL - ADDITIONAL COMMENTS/FOLLOW-UP SHARE REPURCHASE Aimco has repurchased 597,400 shares at an average price of $42.70 for a total of $24.3 million year to date in 2001. Aimco is authorized to repurchase up to 2.5 million shares. To date, Aimco has repurchased 350,364 shares of this authorization. REDEVELOPMENT Aimco has the following additional units coming on line as a result of completed redevelopment activities in 2001:
Units ----- Q1 2001 576 The Greens in Chandler, AZ and Doral Oaks in Temple Terrace, FL Q2 2001 327 The Hills of Arboretum in Austin, TX Q3 2001 332 Meadow Creek in Boulder, CO Q4 2001 614 Grand Flamingo - North Tower in Miami Beach, FL --- Total 1,849